UK bottled water market dominated by Danone with a 36% value share

Off-trade value sales within the UK bottled water market declined by 1%, despite volume growth of 3% in 2012. The category saw a decline in average unit price due to heavy discounts and multipack sales in 2012.

Discounts and increases in pack size in the carbonates category represented a threat as consumers could switch from bottled water for their on-the-go consumption, thus manufacturers responded, offering greater value.

There was a drop in unit price across all the categories of bottled water in the UK in 2012. The drop in price per litre was largely driven by increased pack sizes, such as 2-litre and 5-litre bottles, and discounts on multipacks.

In 2012, UK consumers grew more price sensitive and value driven, shifting towards multipacks and bigger volume packs such as 2-litre packs, which were offered at lower prices. Additionally, origin has become a key trend in bottled water as consumers seek to minimise environmental impact and support home-grown brands through the downturn.

As a result, there has been a consistent move towards consumers purchasing more local bottled water products, turning to products that are produced in Britain or owned by British companies in the UK.

Even private label operators have been quick in adopting UK branding. Tesco, for instance, launched Welsh Natural Spring Water, while its private label range also includes Perthshire and Ashbeck Still Water, branded as British.

Vending sales of bottled water declined significantly in the UK, from 13 million litres in 2011 to nine million litres in 2012. The price difference between vending and other channels widened further, with convenience stores and independent small grocers being the key beneficiaries of shifting demand. However, the majority of consumers purchase larger packs of bottled water through supermarkets and hypermarkets.

Danone Waters (UK & Ireland) Ltd remained the leader with a 36% off-trade value share in 2012. The company benefits from strong brand presence and an effective distribution system in the UK. Its brands were among the earliest movers in terms of bottled water supply in the country, developing strong consumer loyalty.

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